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In opinion of FX Strategists at UOB Group, USD/JPY faces further gains once 110.35 is cleared.

Key Quotes

24-hour view: “We highlighted yesterday that USD is likely to ‘advance further even though overbought conditions suggest that it is unlikely to challenge the major resistance at 110.35’. Our expectation did not quite materialize as USD traded in a quiet manner and within a narrow range of 20 pips (109.96/110.16). Despite the quiet price actions, we still see chance for USD to edge higher. However, any advance is still unlikely to challenge the major resistance at 110.35. Support is at 109.95 followed by 109.80.”

Next 1-3 weeks: “Our update from yesterday (15 Jun, spot at 110.05) still stands. As highlighted, risk is beginning to shift to the upside but USD has to close above the major resistance at 110.35 before a sustained advance can be expected. The next resistance is at 110.60 followed by 110.95. On the downside, a breach of 109.60 (‘strong support’ level was at 109.40 yesterday) would indicate that the upside risk has dissipated.”